🏡 House Affordability Calculator
Lenders cap housing costs with the 28/36 rule. Enter your income, debts, and down payment to find your maximum home price.
How Much House Can You Afford?
Affordability is not about the sticker price — it is about the monthly payment. Lenders work backwards from your income using the 28/36 rule, and this calculator does the same math in reverse.
The 28/36 Rule
Your housing payment (PITI: principal, interest, taxes, insurance) should not exceed 28% of gross monthly income, and all debts combined should stay under 36%. Your housing budget is the smaller of (28% of income) and (36% of income minus other debts). The calculator then solves for the home price whose PITI exactly fills that budget, accounting for your down payment, rate, tax rate, and insurance.
Worked Example
$120,000 income, $800/mo debts, $60,000 down, 6.8% 30-year rate, 1.1% property tax, $1,800/yr insurance. Housing budget = min(28% × $10,000, 36% × $10,000 − $800) = $2,800/mo. Solving PITI = $2,800 gives a max price of about $409,000 — a $349,000 loan with $2,275 P&I, $375 tax, and $150 insurance per month.
How to Use This Calculator
Use gross (pre-tax) income and list every recurring debt minimum. Remember the result is a ceiling, not a target — buying 10–20% below your max leaves room for maintenance (budget ~1% of home value per year), rate changes on ARMs, and life. A bigger down payment is the fastest way to raise your max price without raising risk.
What the 28/36 Rule Misses
The classic 28/36 rule — housing under 28% of gross income, all debts under 36% — is a ceiling, not a target; in high-cost cities buyers routinely stretch to 35–40% housing ratios, which works only with strong job security and no other debt. Budget the invisible costs: maintenance (~1–2% of home value/year), homeowners insurance, HOA dues, and PMI (~0.5–1%/year) if you put down under 20%. A rate buydown (paying points) only pays off if you stay past the breakeven — roughly divide points cost by monthly savings. And remember: pre-approval amounts reflect the lender's risk tolerance, not your budget — approval at $800,000 doesn't mean $800,000 is wise. Run this calculator with your actual comfortable payment, then shop below the max.
Frequently Asked Questions (FAQs)
What is the 28/36 rule?
Spend no more than 28% of gross monthly income on housing (PITI) and no more than 36% on all debts combined. Conventional lenders use it as the benchmark, though programs like FHA allow higher ratios.
How much house can I afford on $100k salary?
Roughly $350k–$400k with 20% down at 2026 rates and modest debts — but debts, taxes, and insurance swing it widely. Run your exact numbers above.
Should I buy at my maximum approval amount?
Usually not. Lenders approve the max you can service, not the max that keeps you comfortable. Most advisors suggest housing at 25% or less of take-home pay.
Does a bigger down payment increase affordability?
Yes, twice: it shrinks the loan (lower P&I) and avoids PMI below 20% down, which effectively raises the price you can carry on the same monthly budget.
What costs do first-time buyers forget?
Closing costs (2–5% of price), moving, immediate repairs, and ongoing maintenance (~1% of value/year). Keep an emergency fund separate from your down payment.
Last updated: September 2026
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Last updated: September 2026